Historically, driver retention plummets during periods of economic growth and recedes when freight volumes decline. This pattern did not hold in 2019 and 2020. Retention rates were in freefall in 2019 as the freight economy cooled after a white-hot 2018.
Falling retention has negatively impacted fleet profitability by dragging revenues down from idle equipment and inflating the costs of fleet administration to erase profits which are already contracting. It also put a heavy strain on the culture of transportation companies.
In January, CCJ shared the successful efforts of Paper Transport, Inc. (PTI) to improve its workforce by adding a new criteria to its hiring process. As of October 2018, driver applicants have had to take an online assessment test that predicts behaviors.
The assessment PTI uses is from JOBehaviors. The company recently published an in-depth whitepaper that explains how PTI and others in the transportation industry are using the tool for a predictive driver hiring process.
An edited summary of the whitepaper is below. The full version is available at: White Paper: JOBehaviors & Paper Transport Inc.
The selection technology used by PTI and other leaders in the trucking industry explores how drivers will behave on the open and in front of clients. The tool can predict how safe, loyal, and productive candidates will be compared to the best, most highly tenured drivers in their fleet.
Turnover costs are just one outcome of hiring decisions. The people who companies put behind the wheel have most, if not all, direct impact on business health, from accidents rates, miles driven, fuel efficiency, unscheduled maintenance costs and customer satisfaction with driver interaction.
Flipping the switch
In March 2018, Paper Transport, Inc. (PTI) reached a critical juncture. Ben Schill, vice president of the De Pere, Wis.-based truckload carrier, was disturbed by the fleet’s rise in turnover of 10 percentage points since January to surpass a 70% annualized rate.
The high turnover negatively impacted the fleet’s operations and culture. He began to explore options to improve the recruiting process, thinking that perhaps a mathematical solution would help PTI identify safe applicants who would be a better fit for the company.
“My mind was slanted around predictive analytics and that space,” he says.
Schill discovered a predictive behavior assessment tool from JOBehaviors. In the competitive trucking business, he recognized that adding more qualifications to the hiring process might be risky in terms of sustaining business growth, but management of PTI was fully onboard.
The company, which operates about 900 power units, began using JOBehaviors in October 2018. Going forward, all driver applicants had to take the online assessment that predicts commitment, safety, professionalism, productivity, customer care and other areas of job performance.
From that point, the company only hired candidates who rate in the top half of the hundreds of thousands of drivers who’ve taken the assessment.
Predictive hiring at work
JOBehaviors conducts extensive behavioral analysis with top rated drivers in the industry to formulate objective, scientific pre-hire assessments. It combines the method with a proprietary rating system to determine how closely candidates match behaviors of the best, worst, or average drivers on the road.
JOBehaviors has pre-hire assessments specifically engineered for long haul drivers, delivery drivers (who typically have more customer interaction), freight handlers, diesel mechanics, school bus, and motor coach drivers. The assessment takes drivers about 10 minutes to complete with simple questions asking them to choose behaviors they identify with.
As soon as candidates complete the assessment, JOBehaviors 5-star rating system clearly advises companies whether to move forward or end that candidate’s journey in the hiring process.
Each star represents percentiles. Driver candidates in the top 50% (3, 4, and 5 stars) are most likely to stay and positively impact a fleet’s culture and profitability. Likewise, the bottom percentiles are far more likely to leave and cause a drain on profitability.
Implementing the tool can be done with step-level changes. A fleet could at first avoid 1-stars to focus on the top 70% of candidates, for example, and then at a later date raise the bar to the top 50% of job applicants. The tool is a turnkey system.
When fleets sign-up they get an online account and a custom URL link to send to drivers as part of the job application process. The URL can easily integrate with the workflow of driver applicant tracking systems.
Drivers do not see their scores when finished. The results are instantly emailed to a recruiter as well as archived for the fleet.
After flipping the switch in October 2018, Paper Transport had an opportunity in February 2019 to use JOBehaviors for a group of about 50 drivers who applied to PTI at the same time. The drivers worked for a different motor carrier that PTI replaced by taking over a dedicated customer account.
If a random group of drivers took the assessment, Schill predicts about half would score 3 to 5 stars on the assessment. In this instance, 80 percent of the drivers scored in the top 50 percentile. The results validate the accuracy of the JOBehaviors predictive tool, Schill says.
“It made sense because all of the drivers had been [at the previous carrier] for a while,” he says. “The average tenure of the drivers was multiple years and their job performance was high.”
About 40 percent of PTI’s drivers, to date, have gone through the JOBehaviors assessment since October 2018.
One of the first benefits that PTI realized was a higher percentage of drivers showing up for orientation. For years, PTI’s orientation no-show rate hovered around 30 percent. With JOBehaviors the rate dropped to 10 percent straightaway and the cost savings were immediate.
PTI is now spending far less on pre-paid transportation and lodging expenses for no shows. Since October 2018, driver turnover in the first 90 days fell by 33% and the fleet’s overall turnover rate went from 79% to 48% on an annualized basis.
“I wholeheartedly believe that JOBehaviors is crucial to a lot of this,” Schill says.
Management expects to realize further improvements in turnover as a larger percentage of the fleet goes through the JOBehaviors hiring process.
PTI has seen improvements in driver performance across the board since it implemented JOBehaviors in October 2018. Drawing straight-line conclusions for the changes is difficult because 60% of drivers in the fleet, as of February 2020, were not brought through the predictive hiring process.
From a top-level perspective, Jeff Shefchik, president of PTI, credits JOBehaviors for the company’s ability to bring in higher quality candidates. Besides reducing turnover, the company has seen improvements in the areas of driver training, equipment maintenance, customer service and safety, he says, “When you bring in a better-quality candidate, everything gets better in your business.”
Ben Schill has tracked step-level changes for all these areas by analyzing data from PTI’s driver scorecard. Comparing data for new driver hires in 2018 to new hires in 2019 by month of tenure (1st month, 2nd month, etc.) shows the improvements at PTI that can be attained by any size fleet by using predictive analytics at the point of hire.
- Productivity gains for PTI have come by lowering turnover and by having a more engaged driver force, adds Wes Kornowske, vice president of operations. Drivers are willing to take extra loads during the workweek.
- PTI has seen fuel efficiency improvements from JOBehaviors. The MPG scores for drivers it hired since with JOBehaviors are 3% higher than drivers hired prior. Idle time reduction has been the most significant improvement. “Drivers care a little bit more,” Schill says.
- With a more engaged driver workforce in 2019, PTI’s fleet maintenance costs were under budget. Although the costs went up, as they do every year, the rate of increase in 2019 was lower than previous years, Kornowske says.
- Drivers hired by PTI in 2019 have had fewer preventable accidents and fewer speeding infractions than drivers hired in 2018. The average safety scores of PTI’s scorecard improved a modest amount in 2019, but the year was among the company’s safest ever. “What we have found is that a safe driver is going to score well on the assessment,” Kornowske says.
The cost savings PTI achieved from reducing turnover have to be weighed against the slower growth that it experienced in the first few months as a result of approximately 50% of driver applicants not making the cut. Paper Transport is willing to make this tradeoff to have a more sustainable and profitable model of future growth.
“We certainly cannot grow as fast as we used to but over the long term we are going to grow more,” Kornowske says.
As part of its long-term growth strategy, Paper Transport is able to accurately predict the success of drivers it hires from CDL schools with the JOBehaviors assessment. Once new drivers go through PTI’s training program, they have performance scores in PTI’s scorecard system that are higher, on average, than tenured drivers.
For PTI to identify high performance drivers from CDL schools who lack a previous track record in the industry further validates the use of predictive analytics for hiring.
“Now we have committed people coming through the door that really want to work with us,” he says.